New Company - What you can – and can’t – put through your company

Starting a limited company comes with great opportunities to be tax efficient—but also a few rules that need to be followed carefully. This guide highlights some more popular areas where you can legitimately extract value from your company.

⚠️ First Things First (Golden Rules)

Before we get into specifics:

• ✅ All contracts must be in the company name (not your personal name)

• ✅ All costs should be paid directly from the company bank account

• ❌ Avoid paying personally and reclaiming via expenses unless absolutely necessary

• ❌ Don’t “mix” personal and business spending—this creates tax risk and admin headaches

  
  

🎁 Trivial Benefits

• Up to £50 per benefit

• Maximum £300 per director per personal tax year (if you’re a close company)

• Must NOT be:

  • Cash or cash vouchers

  • A reward for work or performance

Examples: birthday gifts, small hampers, meals

🎉 Annual Staff Event

• Up to £150 per person per year (including VAT)

• Can include directors + guests

• Must be an annual event (e.g. Christmas party, summer event)

⚠️ If you exceed £150, the whole amount becomes taxable, not just the excess

📱 Mobile Phone

• One mobile phone per employee/director

• Contract must be in company name

• 100% of handset and call costs covered

⚠️ If contract is in your personal name → taxable benefit

👓 Eye Tests

• Employer-paid eye tests = tax-free

🧠 Pension Advice (£500 Allowance)

• Up to £500 per year per employee/director

• Paid by company directly to advisor

• No tax or NIC

🏠 Working From Home

Option 1: Flat Rate

• £6 per week (£312 per year)

• No evidence required

Option 2: Rent a Room to the Company

• Company pays you rent for home office use

⚠️ Must be:

• Commercially justifiable

• Supported by a rental agreement

• Carefully structured to avoid CGT issues on your home

🧑‍⚕️ Counselling / Employee Support

• Fully paid by company

• No tax on the individual

Covers:

• Stress counselling

• Mental health support

• Wellbeing services

📚 Training Costs

• Fully allowable if wholly and exclusively for the business

Examples:

• Industry updates

• Skills training relevant to your trade

• Compliance courses

⚠️ Not allowable:

• Training to start a new trade or business

💼 Pensions (Bonus Reminder)

Although not on your original list, worth highlighting:

• Employer pension contributions are:

  • Tax deductible

  • No NIC

  • Not taxable on you personally

🚨 Common Mistakes to Avoid

• Paying for things personally and reclaiming regularly

• Putting personal subscriptions through the company

• Contracts (phone, leases, software) in your own name

• Mixing personal and company spending

💡 Final Thought

If something feels like a “grey area,” it probably is. Quick check-ins before spending can save a lot of tax (and stress) later.

Woman saving her company money